Should Presidential Pay Be Tied to Student Performance?

By Corey Murray

March 28, 2014

With pressure to improve completion rates mounting, community colleges in Massachusetts join a growing number of institutions opting to tie executive pay to student performance, at least in part.

John O’Donnell makes a comfortable salary as president of Massachusetts Bay Community College (MassBay). Now, thanks to a new statewide initiative, he’ll be able to earn even more, depending on how his students perform. And he’s not alone. Across the country, colleges are considering ways to link presidential pay to student success.

Performance-based pay: How’s the old saying go? Accountability begins at the top? That’s the message MassBay trustees sent earlier this year, when they recommended that O’Donnell receive an incentive package based on student performance, in addition to his annual salary.

“College presidents need to be accountable,” O’Donnell told the Hechinger Report. In addition to his base annual salary of $211,150, O’Donnell could receive an additional $7,390 for achieving certain performance milestones.

Catching on: O’Donnell is not alone. According to the report, presidents at all of the state’s 14 community colleges and nine state universities will be eligible for bonuses — up to 3.5 percent of annually salary — based on a range of performance measures, from completion rates to workforce-education goals.

Supporters of performance-based incentives for college presidents, variations of which have also emerged in places such as Texas and Arizona, say the approach has proved valuable in the private sector, where chief executives are familiar with these sorts of prove-it-or-lose-it ultimatums from shareholders.

“Institutions can’t afford not to have competent people in these jobs,” Stephen Pollack, a partner with nonprofit consultancy Mercer, told Hechinger.

Are the perks worth it? While the approach appears to be gaining steam, as the Hechinger Report points out, not everyone is on board. In an age of reduced funding and tight budgets, some critics have questioned whether it’s cost effective for colleges to pay out bonuses to their highest-paid employees for doing the job they were hired to do.

Supporters of the program say yes. In fact, some believe bonus pay tied to student performance should be higher. Asked whether the 3.5 percent performance bonus received by college presidents in Massachusetts was enough to spur lasting reforms at the state’s colleges, Massachusetts’ commissioner of higher education Richard Freeland said, “It’s nowhere near as meaningful as I would like it to be.”